Curated by: Luigi Canali De Rossi

Friday, February 24, 2006

User Experience Monetization Replaces Content Business Toll Gates

Good content is like water, or a great view: you build business around it, not on it.

More and more, online content and media publishers are understanding that giving extra reach, a rich end user experience, mindshare and freedom of access to good, quality content creates much more interesting and profitable alternatives that imposing fees to access that content in the first place.

One great example of how this business model can be played out is given by an extremely successful online media company from Asia, which specializes in online games.

The beauty of their approach, is that their flagship interactive online game, used now by tens of millions of people in several Asian countries, is completely free and their key business revenue stream comes from selling a greater user experience.




Headquartered in Seoul, Korea, and with offices in Japan and China (software development), Nexon corporation is all about online gaming. Its car racing game, Kart Rider, has become one of the most popular online destinations after the personal homepage service Cyworld.

Members of Kart Rider have surpassed 15 million users in Korea alone no time at all and record today over 200,000 concurrent users on any given day.

The membership of Kart Rider has also seen a phenomenal growth as more than 40,000 new gamers sign-up daily and making this online game the undisputed leader in this market. And Nexon, the distributor of Kart Rider, is reported to make over 5 billion in profits from this game alone every month.

In 2005 BusinessWeek wrote: "Nexon has built a booming business selling avatars -- digital representations of players online -- and virtual accessories such as cars and goggles. The company chalked up revenues of $110 million last year, some 85% of it from selling such digital doodads. This year, Nexon expects sales of $250 million."


The two winning points for Kart Rider are:

1) Kart Rider is extremely simple to use, requiring gamers only to use the direction arrow keys along with the Shift, Control and Alt keys. Nothing else to learn.

2) Kart Rider charges no fee to play. Most online multi-player games charge a monthly fee while Nexon lets users play for free while offering them to buy a large stock of car accessories and custom cars that make the player look or perform better during the game. Special paint jobs for your car may cost a dollar while a set of special goggles to get you to see better through smoke may set you off $2.50. A BMW mini-cooper may cost $10 and as a matter of fact Nexon is reported to be outselling some of the major car brands in actual absolute sales of specific car models.

For example Kart Riders outsells BMW and Hyundai real cars. In the case of BMW Mini Coopers, Kart Riders has sold 700 times more cars than the real car-maker with over 170,000 units sold versus the actual 253 of the German automobile brand. In absolute terms Kart Riders has already sold over 20 million cars, while Hyundai and Kia together have sold a total of 4 million.

In Kart Rider there is no cost to get going, but it does cost to look good and to perform better than others.

A few days ago, I have had the opportunity to meet with Jay Kim Jung Ju, founder and CEO of Nexon, during an international conference on digital content distribution and here are, first-hand, some of his most interesting answers to my questions:

Jay Kim, who has founded Nexon back in 1994, has also developed a number of online games, including "The Kingdom of the Winds", "Crazy Arcade BnB" and "Mabinogi".

I asked Jay Kim, if buying the most expensive cars was a way to likely secure more race victories, but he explained to me that Kart Rider is not just about speed, and that therefore, custom cars, with special characteristics and features, may sometimes perform and win more than the speediest ones.

Jay Kim Jung Ju calls this approach to monetize online interactive content "Items Selling Business Model".

It works by giving free access to good quality content, by providing extreme ease of use and by designing a unique gaming reality in which the user can "own", customize and share her user experience with others. Money is made not in imposing toll gates but by allowing individuals to create, extend and personalize in infinite ways their own user experience.

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posted by Robin Good on Friday, February 24 2006, updated on Tuesday, May 5 2015

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